The selling of broken and reject biscuits.

Abstract

Bakers Biscuits is the largest biscuit manufacturer in South Africa. As with most manufacturing processes across varied industries, there is a level of waste that the manufacturer has to contend with. This waste, though negligible in terms of final good production, is sold at minimal cost as a means of production cost recovery. The two re-packers who buy the broken and reject biscuits subsequently sell them in informal markets which sits outside the established retail and wholesale market structures. Consumers who purchase these biscuits do so at reduced prices in comparison to the selling prices at established retailers like Checkers and Spar. The aim of this study was to determine the level of esteem in which Bakers biscuits is held in these informal markets. The results of the study could pave the way for Bakers Biscuits to specifically target low-end consumers in the future. A probability sample of 260 consumers were drawn from the total population of 500 customers who purchase regularly from the two re-packers. Data was collected using questionnaires which were developed specifically for the project. Descriptive statistics revealed that there are a significant number of relationships between demographical data and the purchase of broken and reject biscuits. The study revealed that the Bakers brand is highly recognised and esteemed in the informal markets. Furthermore, based on the higher quality of biscuits, consumers are willing to pay more for the brand. It is recommended that the firm undertakes further studies to better appreciate and understand the lower-end consumers of biscuits. It is also recommended that the firm enhance its partnership with the re-packers to pave the way for low-end consumers to possibly become a future target market of the firm. This study can benefit Bakers biscuits by emphasising the esteem of the brand in low-end markets.