To: John Lee, head of the Marketing Department From: Stanley Lee SL, Assistant of the Marketing Department Date: 19 October 2011 Subject: New product report — Bakerlicious shop Breakfast is the building block of our health, especially for the teenagers. A fresh and delicious breakfast definitely helps offer essential daily energy and boost working efficiency. However, only little choices of breakfast are provided in Chinese University of Hong Kong, which certainly reveal a golden market opportunity for the opening of bakery shop. Description of the products and services

Fresh breads with distinct tastes and from different countries are our main features. Not only popular breads such as smoked Ham and Mushroom bread and Long Wiener Roll are included, but delicate ones such as Cheese Souffle and Pork Bun are within our menu. There is soft bread designed for someone taking home and eat for 3 to 4 days. Besides bread, we would like to introduce the order service of cakes for birthday, inauguration or graduation. Decorated cookies are limited in sales every day for the sake of ensuring quality and perfection. Different drinks are provided to give customers the comprehensive services by trying our best.

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Reasons for Introduction Everyone needs a breakfast to keep healthy, but in Chinese University of Hong Kong (CUHK), choices are just few. Franklin, one of the catering shop selling bread, offers high priced breads which stop students from buying; Coffee Corner only provides few choices of products for us, but has to wait a long queue, which are not convenient for commuters or students who seek for fast breakfast services. On the other hand, cakes for birthday and inauguration are in a rising demand for celebration, with expected large increase in the near future under 334 new education curriculum.

Therefore, a high demand for bread and cakes are apparent and definitely needs a bakery shop to give a better service in CUHK. Profile of the target market and customers All CUHK students and staff are our customers. In fact, quite a lot of them have taken morning classes at 8:30am, implying that they need a fresh breakfast to give them sufficient energy to work in the morning. On the other hand, there are over 30 societies within CUHK, indicating that for every inauguration or photo day, demand for cakes are high. Potential benefits to the company, customers and others

To the company, as we provide cheaper and fresher foods than our competitors, it is believed that we are able to make a handsome profit within a few years. Expected revenue for the first year will be $300,000, with initial investment of $100,000, and the payback period is estimated to be within 3 years. 80% of the market share is expected to be captured by our company. To the customers, they now gain the convenient way to get a breakfast as fast as possible in CUHK which is located in the main campus. With a breakfast, they can focus on the lessons and hence learning efficiency is enhanced.

Society committee members now can enjoy our cake services at a reasonable price, which largely reduce the society expenses on refreshments. To others, we are considering granting franchise to other universities once we build up reputation and generate promising profitability. Concerns from our teams The interior design of the bakery shop has consumed large proportion of the initial investment, thus less money is left to recruit extra staff to help the shop operation, so we are considering hiring hotel management students as part time worker in order to reduce total labor cost.

Joint purchase of raw materials such as flour is proved to be an effective way to reduce the overall production cost. Request for approval and support The launching of the bakery shop is believed yielding a big profit with low cost in a few years, which definitely shows a large potential investment opportunity for our company. Therefore, your support and investment are vital to put this shop into practice.